In the aftermath of the renewable energy advocating / facilitating FIT Program Review Report and the release of the Federal Budget, I thought to create an article that ties the two together; so may things are intrinsically connected but most of us are too busy to realise these connections let alone respond to their reality.
I have created this blog post in hopes of stimulating discussion on the implications of Federal policy on the renewable energy industry. I am an engineer not an economist or accountant, so beg liniency for phrasings and terms; I just want to get the discussion going.
So, here we go …
Made-in-Canada’ measures continue to ensure that very little will actually be designed and/or manufactured in Canada.
“Since 2009, the Government has eliminated all tariffs on imported machinery and equipment, and manufacturing inputs to make Canada a tariff-free zone for industrial manufacturers, the first in the G-20. These actions are providing more than $410 million in annual tariff relief to Canadian businesses. Such made-in-Canada measures have helped—and will continue to help—create jobs for Canadians, increase investment and innovation, and improve productivity.”
Canada now lists as 14 out of 17 nations when it comes to $/$GDP expenditure invested in R&D. I propose that opening our markets to those with well established products has hampered, if not negated, the need for R&D within the renewable energy industry here in Canada.
The source of machinery, equipment, and manufacturing inputs pertaining to the renewable energy industry throughout Ontario represents most of the countries within the United Nations. High tech components, ranging from solar modules and inverters through to positive displacement pumps and gasification furnaces are either being imported directly from overseas and the US, or contract manufactured in Ontario to meet domestic content criteria.
I worry that the myriad of international trade agreements will continue to ensure that Canada remains an exporter of raw materials and an importer of finished goods, resulting in a net outflow of dollars and intellectual capacity.
According to Statistics Canada:
2010 Exports = $404.6 billion rise of 9.5% over 2009
2010 Imports = $413.6 billion rise of 10.6% over 2009
- Exports are predominantly related to industrial goods & materials, primarily raw materials in the form of crude petroleum, coal, iron ores, other bituminous substances, copper in ores, wood pulp, natural gas, precious metals, and forestry related products (wood pulp).
- Secondary exports include electronic components, motor vehicle parts, passenger cars, and aircraft engines / parts (predominantly through foreign owned entities and throw backs to the day when we had an automotive industry), canola, and pharmaceutical products.
- Exports of machinery and equipment fell for the third consecutive year.
- Imports of machinery and equipment increased, led by imports of communication equipment, engines, turbines and motors, reflecting the expansion of wind farm projects in Canada. Imports of energy products rose, largely the result of higher prices. Petroleum and coal products, followed by crude petroleum, accounted for most of the gain in this sector. Imports of trucks reached their highest level since 2007, largely reflecting the demand for full-size pickup trucks no longer manufactured in Canada.
Canada’s trade deficit increased from $4.6 billion in 2009 to $9.0 billion in 2010, with a record monthly deficit of $2.4 billion in July. This was the second straight year in which Canada had an annual trade deficit.
Unless the trade agreements proposed through the Federal Budget are appropriately negotiated, this Canada-wide drainage of resources, including natural, intellectual, and man-power will only intensify.
According to Statistics Canada, we are currently trading our natural resources in exchange for cars & trucks, telecom equipment, engines & parts, pharmaceutical products, computers, games, toys, furniture, fixtures, and clothing.
And, we are doing so at a net loss involving more than just $’s. Our intellectual resources, feeling that they are being underutilized, are fleeing the country; a country that is now identifying itself as the resource capital of the world vs. the intellectual capital it should/could be advocating.
Short of advocating protectionist policies, I am not sure how to stop the Canada-wide brain and resource drain. Seeking feedback to get this most crucial of discussions going.
Canada as a relatively new nation, shouldn’t be trying to reinvent the wheel, but we should be able to contribute to R&D and innovation within the relatively new Renewable Energy Industry sector here in Canada.
Key trends in 2010 Statistics Canada: http://www.statcan.gc.ca/pub/65-208-x/2010000/key-cle-eng.htm
Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping (2006 – 2011) http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/gblec02a-eng.htm
The Conference Board of Canada http://www.conferenceboard.ca/hcp/details/innovation.aspx